1. Technical Field
The invention relates to a computer system and a method for managing a financial transaction between an issuer of a note and an investor buying the note, the note being exchangeable into one or more exchange traded items like stocks, stock options, etc. which are contained in a portfolio of the issuer.
2. Discussion of the Prior Art
The complexity and the variety of many financial transactions necessitate a computerization of the financial transactions and consequently the use of computer systems. As a result, computer systems are widely employed in the financial sector and fulfill a plurality of tasks in context with performing financial transactions in a fast and secure manner.
Several computer systems and computerized methods are e.g. known for assisting a corporation in unwinding a portfolio of one or more exchange traded items. In the following, computer systems for selling stocks included within a corporation's portfolio of exchange traded items are described as examples of computer systems configured to manage financial transactions. Generally, the computer systems become increasingly sophisticated with an increasing complexity of the underlying financial transaction.
The simplest example for unwinding a portfolio of stocks is to sell the stocks directly to the market. For this purpose computerized trading systems having a comparatively simple construction may be used. Consequently, selling shares directly to the market by means of computerized trading systems is in most cases rather uncomplicated as far as the technical side is concerned although this tends to cause the seller to be liable to capital gains tax.
As a second example for computer systems which assist a corporation in unwinding a portfolio, computer systems which manage transactions in context with exchangeable bonds have to be mentioned. An exchangeable bond is a debt obligation of the issuing corporation, giving the buying investor the right, but not the obligation, to convert that bond into a fixed number of stocks of the corporation's portfolio until the bond's maturity date. Due to the higher degree of complexity of exchangeable bonds, computer systems for managing transactions like the issue of an exchangeable bond are more complex than computerized trading systems for selling stocks directly to the market.
As pointed out above, the computerized management of transactions relating to exchangeable bonds gives the investor the option to let the bond redeem in order to get the money back. An investor would make use of this option if the stocks underlying the exchangeable bond do not raise sufficiently for them to elect to convert the bond into stocks. In other words, exchangeable bonds are not certain to convert into stocks, meaning that credit rating agencies count the issue of exchangeable bonds towards debt in their assessment of the issuing corporation. Counting the issue towards debt, however, worsens the issuing corporation's credit rating.
As a third example for unwinding a corporation's portfolio of stocks by means of computerized financial transactions is the issue of a mandatory exchangeable bond. The issue of a mandatory exchangeable bond is guaranteed to convert into stocks of the corporation's portfolio within a predefined period of time. Unlike the classical exchangeable bonds described above, mandatory exchangeable bonds thus ensure conversion into stocks. However, mandatory exchangeable bonds have the drawback that investors demand a very high interest rate during the life of mandatory exchangeable bonds since the investors are forced to receive the stocks in the future. Also, due to the sophisticated nature of mandatory exchangeable bonds, these bonds require the use of rather complex computer systems.
As has become apparent from the above, the computer systems currently in use for managing financial transactions between an issuer of a note like an exchangeable bond or a mandatory exchangeable bond and an investor buying the note suffer from several drawbacks. First of all, the nature of the notes implies disadvantages for the issuing corporation which are reflected in the construction and programming of the computer systems. Thus, it is desirable to provide a computer system which is programmed and constructed such that the above drawbacks of a note exchangeable into one or more exchange traded items are avoided. Moreover, there is a need for a computer system appropriately configured in regard to interfaces, input/output components and the like to communicate with its environment such that a financial transaction between an issuer of a note and an investor buying the note can be managed quickly and effectively.
There also exists a need for a method of operating such a computer system which is computerized at least to a large extent and which allows to manage a financial transaction between an issuer of a note and an investor buying the note without the above-mentioned drawbacks. Finally, a computer program for performing such a method is needed.